Fifteen years after the Global Financial Crisis: Recessions and Business Cycles in the History of Economic Thought

Hugo Grotius on Exchange and Price

Lapidus André, PHARE, University Paris 1 Panthéon-Sorbonne

This paper explores the way Grotius, in the chapter on contracts of the book from De Jure Belli ac Pacis (1625) where the causes of the birth of war are discussed, elaborated an original understanding of exchange and price which occupies an interesting position between the scholastic analysis where price was compared to a norm of just price and the later articulation, in classical economic thought, between – typically – natural prices and market prices. With Grotius, the issue was no longer the morality or sinfulness of the transaction, and not yet its exclusive economic concern, but its lawfulness. Drawing on Roman law, his starting point was a critical construction of a typology of acts from which he derived a normative analysis of exchange, which combined three types of equality, relating to information, to the absence of coercion and, finally, to the thing exchanged itself. The realisation of this equality in exchange first makes it possible to identify the legally acceptable price associated with it, a common price understood in an equivalent way by a socially recognised need that measures it or by the labour and expenses of the merchants. This legal acceptance then extends to transaction prices that may deviate from the common price, either because of variations in the tastes of the parties and in the scarcity of the good, or because, in the absence of a common judge, the agreement of the seller and buyer through a bargaining process made it acceptable.

Area: Eshet Conference

Keywords: Grotius; Price; Exchange

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